This Policy Letter outlines the exact handling of bounced checks including FBO actions as would be required in connection with HCO PL 29 Jan 1971 “FINANCE BANKING OFFICERS” and HCO PL 17 Feb 1971 “BASIC FBO DUTIES”.

It is a duty of the FBO to safeguard incoming monies and to ensure that all income is properly and legibly invoiced by the org and that the exact same amount is collected and receipted and banked by himself each day.

FBO records must therefore agree with and verify those of Div 3 always.

All daily income collections are thoroughly checked by the FBO before issue of any invoice of receipt.

He carefully checks the tape total of the day’s income against org invoices. He checks the invoices for admin correctness and legibility. He ensures that all copies of any voided invoices are stapled to the in-series copy.

He then tape-totals the checks and counts the cash against invoice totals.

These must equal the same amount exactly.

He inspects checks for correctness of date and endorsement and quickly obtains any needed corrections.

The FBO then issues his invoice to Dept 7, made to “Dir Income” or “Cashier” in the exact currency of receipt.

He ensures that his deposit slips equal the same amount as org invoice total and the amount of his receipt for the money.

All org income is then deposited to the FBO’s Finance Office Account No. 1.

Thus, any bounced checks are returned from the bank to the FBO.

The FBO receiving a bounced check from the bank debits it to the Org with a MINUS INVOICE of the same number series on which he issues his invoices of daily collections from the org.

The Org Dir Income or Cashier then at once writes his own MINUS INVOICE debiting the account of the person who presented the check. A copy is provided the FBO.

This protects the org from delivering services which have not in fact been paid for.

One org had on its books in excess of $20,000 which had bounced and remained uncollected but which still showed in the customers’ files as credits!

The bounced check is now subject to immediate re-collection action by the FBO, who reports the drawer for FALSE REPORT and personally contacts him to obtain a new check or OK to redeposit.

The FBO makes notes of all collection actions on a single sheet to which all other related papers are attached.

When the FBO has secured collection on the check he writes an invoice crediting the org, attaching a copy to his collection notes to indicate collection complete. These are then filed.

The org Dir Income or Cashier then at once writes his own CREDIT invoice showing “BOUNCED CHECK COLLECTED” and crediting the person’s org account.

The re-collected check is banked by the FBO.

Gross Income as reported on OIC is the total of monies collected by the org and is unaffected by bounced checks or bounced check collections.

Minus invoices for bounced checks are NOT deducted from the weekly income total and recollected bounced checks having already counted as income once are not again counted.

Div 3 weekly invoice tape total excludes any invoices for bounced checks or bounced checks collected.

The FBO’s weekly invoice tape total excludes any such invoices but a separate tape is made by the FBO for any bounced checks and a third for any such collected that week.

FBO deposit slips for checks being re-deposited are made out separately and are so marked by the FBO to distinguish them from Org income being banked.

Refunds and repayments of advance payments are not minus invoiced but are paid by Dept 8.

A voucher copy debiting the customer’s account is placed in his accounts file.

Any monies required for such by the org must be obtained from the FBO before payment from the Org’s Main Account and must be paid out that same week or returned to the FBO as unused.